Insights · AXD Real Estate Dubai
Germany–UAE Tax Treaty for Dubai Real Estate — Status 2026
Is there a tax treaty between Germany and the UAE?
No. The Germany–UAE Double Taxation Agreement of 1 July 2010 was terminated by Germany with effect from 31 December 2021 and has not been applicable since. A successor agreement is not in force as of May 2026. Rental income from Dubai properties owned by German owners is therefore fully subject to the German worldwide income principle — offsetting under §34c EStG (German Income Tax Act) has no effect in the absence of UAE income tax.
Tax implications for DACH owners
| Type of income | Taxation Germany | Taxation UAE |
|---|---|---|
| Rental income | Full, personal marginal tax rate | 0 % |
| Disposal < 10 years | Full as other income (§23 EStG) | 0 % |
| Disposal > 10 years | Tax-free (§23 EStG) | 0 % |
| Inheritance | German ErbStG (Inheritance Tax Act, worldwide income) | No UAE inheritance tax |
What does this mean in practice?
Rental income must be declared in Anlage V (Schedule V) of the German tax return — depreciation (AfA) on the building is possible under §7 Abs. 4 EStG (German Income Tax Act). An offsetting of foreign taxes under §34c EStG is ineffective in the absence of UAE tax liability. After expiry of the 10-year speculation period, the disposal gain from a privately held Dubai property is tax-free in Germany — economically the most important DACH lever. Anyone living in Dubai and having their tax residence there (no residence / habitual abode in Germany) is no longer subject to German unlimited tax liability — see exit taxation on relocation to Dubai.
Sources
- Germany–UAE Double Taxation Agreement of 1 July 2010 (BGBl. II 2011 p. 538) — terminated by Germany with effect from 31.12.2021
- BMF letter on the applicability of double taxation agreements — status 1 January 2025
- §§ 23, 34c EStG (German Income Tax Act) — Private disposal transactions / offsetting of foreign taxes
- UAE Federal Tax Authority — Corporate Tax Law applies to business income, not to private rental income of natural persons
Note: This article is not tax advice. Application in individual cases depends on residence, ownership structure and personal circumstances. For an individual assessment, consult a DACH tax advisor with UAE experience.
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